The March 2025 Budget Review outlined tax proposals for 2025/26 and 2026/27. Except as otherwise indicated below, these proposals stand unchanged, including for personal income tax, transfer duties and excise duties. The main policy changes are the withdrawal of the proposed VAT rate increases, alongside the withdrawal of additional zero-rated items, and a proposed inflation-related increase in the fuel levy.
To account for revenue shortfalls, R20 billion in additional tax revenue is included in the fiscal framework for 2026/27. The 2026 Budget will present proposals to raise this amount.
Major reforms to state spending and the budget process are also under consideration.
Vat
The VAT rate increases and expanded zero-rating proposed in the March 2025 Budget Review have been withdrawn.
Fuel taxes and levies
The general fuel levy has remained unchanged for the past three years to provide consumers with relief from high fuel price inflation. To replace a portion of the lost revenue from the withdrawal of the VAT rate increases, government proposes an inflationary increase in the general fuel levy for petrol and diesel to R4.01c/l and R3.85c/l, respectively, effective from 4 June 2025.